April 18, 2009

I think if readers contribute just a little more to VDARE.com's emergency fundraising drive, they'll turn the lights back on and post my long (but interesting!) article on the New Haven firemen's reverse discrimination lawsuit that will be the most important Supreme Court case of the year.

Gregory Cochran has always been drawn to puzzles. This one had been gnawing at him for several years: Why are European Jews prone to so many deadly genetic diseases?

Tay-Sachs disease. Canavan disease. More than a dozen more.

It offended Cochran's sense of logic. Natural selection, the self-taught genetics buff knew, should flush dangerous DNA from the gene pool. Perhaps the mutations causing these diseases had some other, beneficial purpose. But what?

At 3:17 one morning, after a long night searching a database of scientific journals from his disheveled home office in Albuquerque, Cochran fired off an e-mail to his collaborator Henry Harpending, a distinguished professor of anthropology at the University of Utah in Salt Lake City and a member of the National Academy of Sciences.

That provocative -- some would say inflammatory -- hypothesis has landed Cochran and Harpending in the middle of a charged debate about the link between IQ and DNA.

They have been sneered at by colleagues and excoriated on Internet forums. They have been welcomed to speak at a synagogue and a Jewish medical society. They were asked to write a book; that effort, "The 10,000 Year Explosion," was published early this year.

Scientists are increasingly finding that propensities for human behaviors -- for addiction, aggression, risk-taking and more -- are written in our genes. But the idea that some groups of people are inherently smarter is troubling to many. Some scientists say it has such racist implications it's unworthy of consideration.

"What are their theories about those on the opposite end of the spectrum?" asked Neil Risch, director of the Institute for Human Genetics at UC San Francisco, who finds the matter so offensive he can barely discuss it without raising his voice. "Do they have genetic theories about why Latinos and African Americans perform worse academically?"

The biological basis for intelligence can be a thankless arena of inquiry. The authors of "The Bell Curve" were vilified 15 years ago for suggesting genes played a role in IQ differences among racial groups.

Speaking of interesting but overconfident Internet pundits, a few years ago a reader pointed out to me that "Spengler" was very likely David P. Goldman, a former high-ranking member of the Lyndon LaRouche cult.

I won't explain the persuasive evidence for his long-ago Lyndon LaRouche connection, since that would necessitate revealing his real name, which might hurt him in his day job. But I'm 95% persuaded of a reader's suggestion that many years ago the individual who is now the extremely self-confident columnist "Spengler" of the Asia Times was a close colleague of the crackpot perennial Presidential candidate.

That reminds me that adventuring in the Middle East seems to appeal most to two sets of people:

- The not very bright sorts who get Iraq and Iran and Saddam and Osama confused.

- And the extremely bright but not quite stable sorts who can convince themselves of anything.

Now, Spengler/Goldman, who is an editor at First Things, has come out with a column in Asia Times doing the opposite of what I did: revealing his name, but not his old Larouche connection.

Now, just because somebody belonged to a cult doesn't mean that we shouldn't take them seriously. For example, Alan Greenspan was part of the inner circle of Ayn Rand's cult well into his forties (going so far as to sign the notoriously loony Stalin-like manifesto denouncing Rand's ex-boyfriend Nathaniel Branden when he was 42). And then Greenspan became the most powerful unelected official in the world, and look how swell that worked out.

Oh, wait ... never mind. I guess I need to find a new example of an ex-cultist making good. Let me get back to you on this one ...

As for Spengler's opinions of me, he recently posted this on one of his discussion pages:

"I think Sailer is a racist SOB who sees the data through a distorted lens. Not all of what he says is wrong, though. There is a problem with illegitimacy. But I don't think Hispanics are stupid as he argues."

"Sailer is deeply misguided. A lot of the Hispanics coming to the US are in fact Asians -- southern Mexican or central American Indians with very poor education, nutrition, etc. Their first generation is pretty disastrous, but so were the Irish, Italians and Slavs. The Catholic Church in America wrote off a whole generation, maybe two, of Irish men. Can they assimilate? Sure. But I ought to point out that American kids of European ancestry aren't doing so well at the moment, either."

This is a classic example of the East Coast intellectual's ruling mental framework for thinking about illegal immigration: it's always all about Ellis Island. It's not about 2009, it's about bragging rights over 1909.

And, besides, nobody around here ever noticed any Mexicans around until 1997. So, their future must be a complete blank slate! Anything could happen. They have no track record whatsoever!

By the way, in case you were wondering (and, admit it, you were), Lyndon LaRouche is one of those folks, like Hugh Hefner, whom many people just assume are Jewish, but aren't.

April 17, 2009

We've been reading about the subprime mortgage crisis for a couple of years, but I'd never seen a graph of subprime mortgage originations by ethnicity showing exactly who got the subprime home purchase dollars.

So, I decided to create some graphs myself. After all, my tax dollars pay for the massive federal Home Mortgage Disclosure Act database (Table 11-3, to be precise). The government runs this system to make sure that minorities get enough mortgage money. I guess we can say:

Mission Accomplished!

Unfortunately, before 2004 the HMDA didn't break out subprime loans (which it cryptically calls "Reported Pricing Data"). But presumably the subprime dollars originating were much lower before 2004. We can more or less date the beginning of the subprime explosion to President Bush's October 15, 2002 White House Conference on Minority Homeownership, in which he gave a big wink to the mortgage industry to put the pedal to the metal on zero down and zero doc loans in the name of Bush's goal of adding 5.5 million minority homeowners.

Of course, plenty of white deadbeats got subprimes, too. This racial-equality-in-access-to-the-American-Dream stuff was just a cover story for debauching credit standards.

But, you've got to admit, invoking the sacred war against racist redlining was one hell of an effective cover story ... Who was going to be so racist as to publicly say that we shouldn't expand homeownership for minorities? Who would say that minorities didn't have equal creditworthiness?

It was such a fantastic cover story, that here it is, almost the middle of 2009, and you are just now seeing a graph of who got the money, even though the 2006 numbers have been available for free on the Web since September 2007!

We still don't know the subprime default rates nationally by ethnicity, but the recent Boston Fed study found that the default rates on black and Hispanic subprime loans in Massachusetts were about twice the rate of white subprime borrowers.

If that holds true for the whole country, then minorities appear to account for roughly two-thirds of defaulted subprime dollars.

Why haven't we been hearing this in the press? Well, it's just not the kind of thing that is talked about in polite society. I mean, really, we can spend all day going back and forth over who loaned whom hundreds of billions of dollars and who didn't it pay it back, but, in the final analysis, shouldn't we be proactively focusing upon hope and change? And the American Dream? And vibrancy? Never forget vibrancy.

To recap:

- In 2002, Bush, who was hoping to turn Hispanics into Republican voters by making them homeowners, stumped for eliminating down payments on home purchases and pesky paperwork on mortgages in order to close the racial gap between the white homeownership rate and the lower black and Hispanic rates.

- 2003 was the ramping-up year.

- In 2004, subprime lending exploded, with minorities getting 51% of the home purchase mortgages (not counting the negligible streams of FHA and VA money). All this new demand for homes from people who hadn't been able to qualify for loans previously drove home prices through the roof in some parts of the country.

- In 2005, subprime lending reached a bizarrely high plateau, with minorities getting 57% of the subprime money handed out that year.

- In 2006, subprime lending stayed high, but the mortgage industry was scraping even farther down to the bottom of the barrel to find all the people who couldn't qualify for a subprime loan even in 2005. Minorities got 58% of 2006's new subprime money.

- In 2007, the air started coming out of the bubble as our financial geniuses began to realize that the kind of people who got subprime loans in 2005 and especially in 2006 weren't terribly likely to ever earn enough to pay them back. Total subprime lending dropped, as did minority share (down to 50%).

Minorities also got about 44% of subprime refinancing and home improvement loans in 2006, although those had less effect on driving home prices up and tended to have not quite as insane Loan-to-Value numbers.

Interestingly, minorities averaged larger subprime home purchase mortgages in 2006 than white subprime borrowers got. The average white subprime loan originated in 2006 was $183,000, while the typical black subprime loan averaged $191k, Hispanic $242k, and Asian $326k. Presumably, this is because quite a few whites live in low cost rural areas, while blacks are concentrated in metropolitan areas, and Hispanics and Asians are most numerous in super-bubblicious California.

In California, where a majority of the country's defaulted mortgage money (prime and subprime) has been lost, minorities got a much higher percentage of subprime lending. In the five counties of Greater Los Angeles (LA, Orange, Ventura, San Bernardino, and Riverside), minorities got 79% of subprime dollars in 2006:

California's bubble pretty much drove the bubble in the adjoining states of Arizona and Nevada, which with Florida, covers the great majority of foreclosed upon mortgages when measured in dollars.

In Ground Zero of the Foreclosure Crisis, Southern California's Inland Empire of San Bernardino and Riverside Counties, home purchase lending to Hispanics increased from 1999 to 2006 by 782%.

Now we may have a clue to the answer to that old question in Johann Hari's bedazzled tongue-bath of Andrew Sullivan, the Barry Bonds of bloggers.

If anybody is interested in why Sullivan is so super-confident in his judgment despite so often being wrong in public (as his mercurial changes of view demonstrate), he explained why in the NY Times Magazine way back in 2000: He had revitalized his flagging career in the late 1990s by getting a prescription for synthetic testosterone.

"Because the testosterone is injected every two weeks, and it quickly leaves the bloodstream, I can actually feel its power on almost a daily basis. Within hours, and at most a day, I feel a deep surge of energy. It is less edgy than a double espresso, but just as powerful. My attention span shortens. In the two or three days after my shot, I find it harder to concentrate on writing and feel the need to exercise more. My wit is quicker, my mind faster, but my judgment is more impulsive. ...

And then after a few days, as the testosterone peaks and starts to decline, the feeling alters a little. I find myself less reserved than usual, and more garrulous. The same energy is there, but it seems less directed toward action than toward interaction, less toward pride than toward lust.

We'll skip over the details of Andrew's Lust Phase and get to his next mood swing:

... "Then there's anger. I have always tended to bury or redirect my rage. I once thought this an inescapable part of my personality. It turns out I was wrong. ... That was an extreme example, but other, milder ones come to mind: losing my temper in a petty argument; innumerable traffic confrontations; even the occasional slightly too prickly column or e-mail flame-out."

Personally, I don't like competing with a chemically pumped-up pundit anymore than I suspect that pitcher Greg Maddux liked competing with Roger Clemens over the last decade or so of their careers. But the bigger point is that the Atlantic Monthly should put a label on Sullivan's blog that says:

Warning: Don't take anything Andrew Sullivan says seriously. Remember that what you see here is the product not of careful thought and proven good judgment, but just of whatever phase of his hormone therapy Andrew happens to be in at the moment.

April 16, 2009

One element of the conventional wisdom about racial achievement gaps that has become particularly popular in recent years is the idea that the gap is caused by the fact that the parents of poor children tend to have small vocabularies and generally don't engage their children in mentally stimulating discussions. Much of this tracks back to a project several decades ago by Betty Hart and Todd R. Risley, who recorded 1300 hours of 42 families during various in-home sessions over 2.5 years, and then tabulated every word they said.

Not surprisingly, they found that professional class parents spoke to their children with larger vocabularies, had more interesting things to say, and tended to speak more encouragingly to their children along the lines of "Why, that's a very interesting observation, honey; why do you think that is?" In contrast, the welfare moms' tended to more often interact with their children in the "Shut yo' mouth" mode.

Hart and Risley write:

Before children can take charge of their own experience and begin to spend time with peers in social groups outside the home, almost everything they learn comes from their families, to whom society has assigned the task of socializing children.

I remember when I got the memo from Society informing me that my wife and I had been assigned the task of socializing our children. It came as quite a shock, let me tell you.

We were not surprised to see the 42 children turn out to be like their parents; we had not fully realized, however, the implications of those similarities for the children's futures.

So, the conventional wisdom insists, what we must do is take poor children away from their homes each day from age one upward and put them in day care staffed by college trained professionals from age one onward, who will mentally stimulate them by speaking with large vocabularies.

But, is it really true that "almost everything they learn comes from their families?" Well, no. Among other sources, a lot of what children learn comes from the media.

For example, I've heard about this brightly colored cartoon show about the adventures of a ten-year-old boy and his wacky family, and each episode features the carefully concentrated cognitive liveliness of about a dozen of the most mentally effervescent Harvard graduates of recent years. And it's on free TV twice a day in most cities!

You might have heard of it, too: it's called The Simpsons.

Each of the 450 or so episodes of The Simpsons is a lot more mentally stimulating than listening to your parents or to your daycare worker talk. (Okay, well, some of the episodes from this decade might not live up to that standard, but there are still a couple of hundred good ones.)

By the way, I haven't been able to find anything on Google about the Nielsen Ratings of The Simpsons in black households. It probably doesn't help the shows' rating among blacks that the writers are clearly completely terrified of poking fun at blacks, so the show is kind of boring for black audiences.

Thus, out of the huge cast of recurring characters, the only black ones are Dr. Hibbert and his wife, who go back to the show's ancient rivalry with The Cosby Show, and one each of two interchangeable white-black pairs: Homer's coworkers Lenny and Carl and the cop partners Eddie and Lou. After 20 years, I still can't tell you which one are the black guys and which ones are the white guy. Presumably, the interchangeability of the two white-black pairs is an in-joke from the writers about how afraid they are of touching anything black-related.

Recently, Department of Homeland Security Secretary Janet Napolitano announced that she was going to crack down on the border ... the Canadian border. Now, her Department has circulated to law enforcement agencies nationwide an intelligence report telling them to be on the lookout for conservatives:

The report also said a push for new immigration legislation that would grant residency or citizenship to people who entered the country illegally could fuel anger among groups fearing competition for jobs.

The Department of Homeland Security has yet to follow this logic out to its inevitable conclusion and home in on the obvious real threat: Canadian conservatives.

Perhaps we'll soon see a campaign coordinated amongst the Obama Administration, the SPLC, and the New York Times editorial board about the looming menace to the American Dream posed by I, Ectomorph.

Three-year-olds whose mothers had taken valproate during pregnancy had I.Q. scores that were nine points lower on average than children whose mothers had taken a different antiseizure medication, lamotrigine. The I.Q. scores of toddlers whose mothers took valproate were also lower than scores of children whose mothers took two other antiseizure medications, phenytoin and carbamazepine. ...

Cognitive assessments were conducted in 258 2- and 3-year-olds born to 252 mothers, of whom 53 had taken valproate.

Over all, children’s I.Q. scores were strongly related to mothers’ I.Q. scores, except among the children of mothers treated with valproate [generic name Depakote], the study found.

At age 3, children exposed to valproate in utero had a mean I.Q. of 92, compared to 101 for children exposed to lamotrigine, 99 for those exposed to phenytoin, and 98 for those exposed to carbamazepine, the study found.

Have you ever noticed how in the New York Times' universe, IQ is unquestionably valid and terribly, terribly important in the Health section of the newspaper? (See, for example, the NYT's recurrent coverage of the effects of the exposure to lead in reducing I.Q.)

In this Health section article, for example, the Times is getting worked up over an IQ test given to 2-3 year olds, which is pushing the age limits of IQ testing. And the sample size is only 53. And yet, there's absolutely zero quibbling about the usefulness of IQ testing in this article. It's simply assumed that, of course, everybody knows that a difference in average IQ scores of about eight points is a big deal.

Yet, in the Education section of the Times, where you might think IQ would be even more relevant, it rarely comes up. And when it does put in an unwelcome appearance, it is often dismissed as discredited.

These days, everybody is in favor of having Better Teachers in our public schools: Barack Obama, Arne Duncan, Bill Gates, the whole gang. Everybody is in favor of hiring Better Teachers and easing out Worse Teachers.

Heck, I'm in favor of Better Teachers.

But guess what Obama et al haven't figured out yet about Better Teachers? It's something that James S. Coleman figure out in working on his 1966 Coleman Report.

I'm reading Race and Education: 1954-2007 by U. of Delaware historian Raymond Wolters. It's an academic study that's well-written enough to appeal to a mass audience. It's unusual in that it covers both the well-trodden ground of Supreme Court decisions about race and public schools, from Brown v. Board of Education onward, while at the same time recounting exactly the unintended consequences of what those august deliberations did to real children in the classrooms and hallways and lavatories.

A major figure in the book is quantitative sociologist James S. Coleman, who was given $1 million by the 1964 Civil Rights Act to study how much blacks were shortchanged by the public schools. But his 1966 Coleman report proved disappointing to LBJ Administration. Wolters writes:

The achievement gap troubled Coleman. As a sociologist he was inclined to ascribe the differences in black and white test scores to the influence of the social environment, and he also knew that attributing even part of the difference to racial inheritance would place him outside the pale of his profession and render him ineligible for future frants. For Coleman and for many other educators and sociologist who studied his report, the key variables were family background and neighborhood. There was no correlation between test scores and per-pupil spending, age of textbooks, and a host of other measures. But there was a correlation with family background, the education and occupations of parents, and the number of books in the home. ...

For Coleman, these findings were unwelcome. Personally, he favored more spending for education. And Coleman's dismay was compounded by another correlation that emerged from the data. Both black and white children seemed to do better on tests if their teachers had one well on a standard test of vocabulary. This was especially problematical because black teachers were "on the whole less well prepared, less qualified, with lower verbal skills, than their white counterparts." This led to "the conjecture that [students] would do less well on average under black teachers than under white teachers." If so, "a major source of inequality of educational opportunity for black students was the fact they were being taught by black teachers." Yet this possibility was so heterodox that the Coleman report did not pursue the matter. In 1991 Coleman expressed regret over the decision "not to ask the crucial question." "A dispassionate researcher," he wrote, "would have gone on to ask the question we did not ask." ...

Poring over the statistics, he noted that African American teachers, on average, had slightly more years of formal education than their white counterparts. But the black teachers lagged behind whites in vocabulary and reading comprehension.

In other words, what Obama hasn't figured out yet, although James S. Coleman figured it out back in 1966, is that Better Teachers means Whiter Teachers.

When it finally dawns on Obama that if we actually start firing worse teachers and hiring better teachers, we'll be, on net, firing blacks and hiring whites, you can expect this whole effort to get buried so far under affirmative action that nothing good comes of it.

"The era of personal genomic medicine may have to wait. The genetic analysis of common disease is turning out to be a lot more complex than expected.

Since the human genome was decoded in 2003, researchers have been developing a powerful method for comparing the genomes of patients and healthy people, with the hope of pinpointing the DNA changes responsible for common diseases.

This method, called a genomewide association study, has proved technically successful despite many skeptics’ initial doubts. But it has been disappointing in that the kind of genetic variation it detects has turned out to explain surprisingly little of the genetic links to most diseases.

As Matt Ridley has said, no matter what you might think from reading the Health & Science section of your newspaper, your genes didn't evolve in order to kill you. So, this hunt for Killer Genes was always a little dubious, as I've been pointing out all decade.

Instead, your genes evolved to help you survive and reproduce. So, these expensive genome studies have so far proven better at finding the causes of differences in capabilities between individuals and between extended families (a.k.a., racial groups).

Dr. Goldstein argues that the genetic burden of common diseases must be mostly carried by large numbers of rare variants. In this theory, schizophrenia, say, would be caused by combinations of 1,000 rare genetic variants, not of 10 common genetic variants.

This would be bleak news for those who argue that the common variants detected so far, even if they explain only a small percentage of the risk, will nonetheless identify the biological pathways through which a disease emerges, and hence point to drugs that may correct the errant pathways. If hundreds of rare variants are involved in a disease, they may implicate too much of the body’s biochemistry to be useful.

An alternative theory, proposed by Greg Cochran and Paul Ewald in the 1990s is that more diseases are caused by infections than we currently assume. (Here's the 1999 Atlantic Monthly cover story on them.) Of course, genes and germs are not mutually exclusive causes. It could be that, say, you'll only get Disease X if you are both exposed to Germ Y and your immune system lacks Gene Variant Z.

Here's the penultimate paragraph from the President's speech on the economy:

There is no doubt that times are still tough. By no means are we out of the woods just yet. But from where we stand, for the very first time, we are beginning to see glimmers of hope. And beyond that, way off in the distance, we can see a vision of an America’s future that is far different than our troubled economic past. It’s an America teeming with new industry and commerce; humming with new energy and discoveries that light the world once more. A place where anyone from anywhere with a good idea or the will to work can live the dream they’ve heard so much about.

Read that last sentence again: "A place where anyone from anywhere with a good idea or the will to work can live the dream they’ve heard so much about."

Obama is an ex-law school teacher, so when he's verbally ambiguous, it's with a purpose. You could read "anyone from anywhere" as meaning anyone with an ancestry from anywhere. But the more straightforward reading is pure Open Borders sentimentality: anyone of Obama's teeming relatives, or any of the other six billion people, should be able to move to America whenever they feel like it as long as they have "the will to work."

It's a useful rule of thumb that any politician who refers to The American Dream is up to no good.

The President is a rich man with an income of several million dollars per year from his books. Why in hell shouldn't he pay to send his illegal immigrant aunt home to Kenya?

That won't come as any surprise to anybody with more than one kid, but the relationship to brain anatomy is interesting. Steve Connor reports:

Personality types are linked with structural differences in the brain - which could explain why one child grows up to be impulsive and outgoing while another becomes diligent and introspective.

Anatomical differences between the brains of 85 people have been measured and linked with the four main categories of personality types as defined by psychiatrists using a clinically recognised system of character evaluation....

Brain scans that measure differences in volume down to an accuracy of less than one cubic millimetre found, for instance, that people defined as novelty-seeking personalities had a structurally bigger area of the brain above the eye sockets, known as the inferior part of the frontal lobe.

If this holds up (and I'm singularly unable to judge -- owing to my lack of 3-d processing power, I never been able to make head nor tail of any article referring to a region in the brain. No doubt my brain region that contributes to 3-d thinking is vanishingly small.)

I’ve long felt we are programmed by evolution to have kids with different personalities as a form of what financial economists like Edward M. Miller call “portfolio diversity:” you don’t want to put all your assets into one basket, such as mortgage backed securities. For example, Genghis Khan’s aggressive personality worked out fine from a Darwinian standpoint (his personal genetic signature appears in a huge number of people across a giant swath of Eurasia), but it probably got lots of other guys with similar personalities killed early. So, you wouldn’t want to have three sons each with Genghis Khan’s personality. They'd just end up skewering each other.

But my more scientist friends roll their eyes when I advocate portfolio diversity and say that’s “group selectionism,” which has been thoroughly exploded.

Hmmhmm ... the four Sand States where 7/8ths or so of the mortgage money has been lost, and New Jersey. If I owned a lot of mortgages in New Jersey, I wouldn't be feeling too good about collecting on them right now.

I've written for VDARE.com a massive article (about 2,800 words) that I think is one of my more interesting ones yet. The topic is the most important Supreme Court case of the year, Ricci, the New Haven firemen's reverse discrimination lawsuit. No fireman in New Haven has been promoted in the last five years because the city threw out the results of the 2003 promotion exam because the politicians didn't like the results by race.

Ricci provides a valuable window into what affirmative action imposes upon American organizations. Typically, the contortions our institutions go through to avoid federal discrimination lawsuits are hidden from public view, but Ricci exposes the bizarre, convoluted, and inane way the game is played.

I've been reading about white firemen's reverse discrimination cases for decades, but I didn't really understand the topic until I did extensive research for this article, and the pieces finally fell into place.

White firemen are exceptional in that they tend to fight more than just about any other occupation. And, strikingly, firemen often win.

Why do firemen fight the government, the media, and the conventional wisdom so often? There are a lot of reasons, but one is clear: firemen are brave.

I look forward to you reading this article.

But you can't read the article now because we're broke. VDARE.com lost a longtime big donor, and so we have to beg for money like a PBS station during a pledge drive until we raise enough from readers like you to to stay in business.

If you look at the my blogroll on the right, you'll see a lot of people who are about as good at what I do as I am. Yet, why do they only post 500 or 1000 words per week, while I post 5000 or 10,000? Because they have real jobs. They have to make the 7am flight to Dallas.

Through VDARE.com and other sources, all ultimately supported by the generosity of people like you, I'm able to scrounge together enough money to do things that, now that I think about it, sound pretty ridiculous. If I want to think about what it's like to be a fireman for three days, I think about what it's like to be a fireman. I have the time to follow threads from the small to the large.

Moreover, VDARE.com gives me the freedom to pick my topics, my length, and my approach. All truths are connected to each other, so it doesn't particularly matter where you start as long as you have the freedom to follow the chain to the end -- a freedom that 99.9% of all paying outlets don't provide.

So, please go to VDARE.com now and make a contribution. I know that times are hard, but there are reasons times are hard, reasons you won't read anywhere else.

John Tierney blogs in the New York Times about a study of "speed-dating" Columbia University:

There’s also a clear gender divide, as the researchers note: “Women of all races exhibit strong same race preferences, while men of no race exhibit a statistically significant same race preference.”

That part about men having no preference sounds a bit like an artifact of doing the study at an Ivy League school where men have to be on their guard for ideological deviancy. Ivy League women, in contrast, would just slough off charges of racism with Ivy League feminist-quality logic: "I can't be a racist because I'm a feminist!"

Here are the study's results for women:

African-American women said yes about 30 percent less often to Hispanic men; about 45 percent less often to white men; about 65 percent less often to Asian men.

White women said yes about 30 percent less often to black or Hispanic men, and about 65 percent less often to Asian men.

Hispanic women said yes about 20 percent less often to black or white men, and 50 percent less often to Asian men.

Asian women didn’t discriminate much by race (except for showing a very slight preference for Asian men over black or Hispanic men).

April 14, 2009

So far, the president's double-homicide has not been covered by any major news outlets. The only two mentions of the heinous tragedy have been a 100-word blurb on the Associated Press wire and an obituary on page E7 of this week's edition of the Lake County Examiner.

While Obama has expressed no remorse for the grisly murders—point-blank shootings with an unregistered .38-caliber revolver—many journalists said it would be irresponsible for the press to sensationalize the story.

"There's been some debate around the office about whether we should report on this at all," Washington Post seniorreporter Bill Tracy said while on assignment at a local dog show. "It's enough of a tragedy without the press jumping in and pointing fingers or, worse, exploiting the violence. Plus, we need to be sensitive to the victims' families at this time. Their loved ones were brutally, brutally murdered, after all."

“Sugar” is a critically acclaimed indie film about a 20-year-old Dominican pitcher’s minor league baseball season in Iowa. “Half Nelson,” the last collaboration of its married auteurs, Anna Boden and Ryan Fleck, brought Ryan Gosling a Best Actor nomination as a caring white liberal teacher in a Brooklyn slum school attended by African-Americans and Dominicans. Because numerous Dominican immigrants in New York City are failed minor leaguers, “Sugar” was a logical next film for the pair.

This movie is about a black Dominican, but it was very much made for white Americans. Indeed, “Sugar” exemplifies Sundance movies. It’s so sensitive, subtle, soft-spoken, averse to crowd-pleasing gimmicks, and generally beholden to the Stuff White People Like rulebook that few ballplayers of any nationality would pay to see it. Dodger slugger Manny Ramirez would snore so loudly through it that the audience couldn’t hear the soundtrack’s climactic song: Leonard Cohen’s Hallelujah sung in Spanish.

Boden and Fleck wanted not a tale of triumph, but a statistically representative illustration of the typical Dominican athlete’s brief playing career and eventual transition into being an illegal immigrant in the South Bronx. ...

The young ballplayer claims he’s nicknamed “Sugar” because he’s “so sweet with the ladies,” but Boden and Fleck intend their film’s title to convey that by signing so many Dominican teens, baseball teams are, like sugar companies, neocolonialist exploiters. ... The real scandal is that big league baseball has facilitated the illegal immigration of tens of thousands of washed-up uneducated jocks. The MLB privatizes profits and socializes costs.

The irony in this trend of dramas striving to be “more documentary-like” is that the best documentaries are far more satisfyingly dramatic than “Sugar.” For example, Werner Herzog’s popular documentary “Grizzly Man” culminates with the annoying protagonist being devoured by a bear. Documentaries that follow somebody as ho-hum as Sugar are unlikely to get widely distributed or even finished.

The Pew Hispanic Center, which I've long admired for doing good statistical analyses without all that much political correctness, has a new report out on illegal aliens (or "Unauthorized Immigrants," as Pew terms them). It was written by Jeffrey S. Passel and D'Vera Cohn. As I started to read it, this slab of boilerplate caught my eye:

The Pew Hispanic Center is a nonpartisan research organization that seeks to improve public understanding of the diverse Hispanic population in the United States and to chronicle Latinos' growing impact on the nation. It does not take positions on policy issues. The center is part of the Pew Research Center, a nonpartisan "fact tank" based in Washington, D.C., and it is funded by The Pew Charitable Trusts, a Philadelphia-based public charity. All of the Center’s reports are available at www.pewhispanic.org. The staff of the Center is:

This list of names says a lot about why East Coast elites don't feel that massive Hispanic immigration provides any noticeable competition that might hinder their kids from getting ahead in their careers. Here are nine nice, respectable office jobs at the Pew Hispanic Center, and they could only find Spanish-surnamed people to fill two of them.

MAN: We want you to tell us what you think. And, be honest, because no one from the show is here spying on you. (chuckles)

A sneezing sound comes from a large mirror on the wall.

LISA: Why is that mirror sneezing?

MAN: Ah, look, it's just an old, creaky mirror, y'know, sometimes it sounds a little like it's sneezing, or coughing, or talking softly.

LISA: Hmm...

The man gives a thumbs-up to the mirror.

MAN: Now, you each have a knob in front of you. When you like what you see, turn the knob to the right. When you don't like what you see, turn it left.

RALPH: (with knob in mouth) My knob tastes funny.

MAN: Please refrain from tasting the knob.

First up, Itchy & Scratchy play pool. Itchy knocks out Scratchy's eyeballs with a cue ball and Scratchy replaces them with two pool balls. The kids laugh turn their knobs to the right. The next cartoon is set on an island. While Itchy & Scratchy sunbathe, a muscle-bound man in bikini trunks flexes in front of the camera. Nelson turns Milhouse's knob repeatedly to the right.

MILHOUSE: Hey, quit it!

From behind the mirror, Meyers and two other people watch on a monitor.

MEYERS [owner of Itchy & Scratchy, Intl.]: They like Itchy, they like Scratchy, one kid seems to love the Speedo man... what more do they want?

Back with the focus group.

MAN: Okay, how many of you kids would like Itchy & Scratchy to deal with real-life problems, like the ones you face every day? (the kids all cheer and agree) And who would like to see them do just the opposite - getting into far-out situations involving robots and magic powers? (more cheering) So, you want a realistic, down-to-earth show... that's completely off-the-wall and swarming with magic robots? (The kids agree)

NELSON: Yeah, good.

MILHOUSE: And also, you should win things by watching!

The man sighs. The light is turned on in the observation booth, and Meyers appears at the mirror.

He turns the lights out. Ralph starts crying and turns his knob to the left.

RALPH: Mommy!

LISA: (talking to the mirror) Um, excuse me sir. The thing is, there's not really anything wrong with the Itchy & Scratchy show, it's as good as ever. But after so many years, the characters just can't have the same impact they once had.

LAWYER: Please sign these papers indicating that you did not save Itchy & Scratchy.

At Itchy & Scratchy, Intl., Meyers has called a meeting of the writers (who look strikingly similar to the real Simpsons writers [i.e., the Harvard Mafia whom my old-next-door neighbor, who was a writer on "Married with Children," used to denounce for ruining the business]) along with Krusty and a female network executive.

MEYERS: I have figured out how to rejuvenate the show. It's so simple, you egghead writers would've never thought of it! What we need is... a new character! One that today's kids can relate to!

The writers look at each other, uncertain.

OAKLEY [writer]: Are you absolutely sure that's wise, sir? I mean, I don't want to sound pretentious here, but Itchy and Scratchy comprise a dramaturgical dyad.

FEMALE EXECUTIVE: In your dreams. We're talking the original dog from hell.

OAKLEY: You mean Cerberus?

FEMALE EXECUTIVE: (pause) We at the network want a dog with attitude. He's edgy, he's "in your face." You've heard the expression "let's get busy"? Well, this is a dog who gets "biz-zay!" Consistently and thoroughly.

FEMALE EXECUTIVE: I feel we should rastafy him by ... ten percent or so.

Silverman redraws Poochie. They're still not totally satisfied.

MEYERS: Hmm... I think he needs a little more attitude.

Silverman blackens in Poochie's sunglasses.

FEMALE EXECUTIVE: Oh yeah, bingo. There it is, right there!

KRUSTY: Yeah, that's it!

MEYERS: I love it!

The next morning, The Simpsons eat breakfast. Bart notices the headline in the newspaper Homer is reading: "Funny Dog To Make Life Worthwhile". ...

[After Homer's debut as the voice of Poochie]

In the Android's Dungeon...

COMIC BOOK GUY: Last night's Itchy & Scratchy was, without a doubt, the worst episode ever! Rest assured that I was on the Internet within minutes, registering my disgust throughout the world.

BART: Hey, I know it wasn't great, but what right do you have to complain?

COMIC BOOK GUY: As a loyal viewer, I feel they owe me.

BART: What? They're giving you thousands of hours of entertainment for free. What could they possibly owe you? I mean, If anything, you owe them.

COMIC BOOK GUY: (pause) Worst episode ever.

Kent Brockman delivers the news.

KENT BROCKMAN: It looks like the end of the venerable Itchy and Scratchy program. For years, TV critics, such as yours truly, Kent Brockman, have waited impatiently for cracks to appear in the show's hilarious facade. Yesterday, our prays were finally answered when Poochie the Dog made his howlingly unfunny debut. Far be it from me to gloat at another's downfall, but I have a feeling that no children are gonna be crying when this puppy is put to sleep.

For a long time, I've been asking this rude question that nobody else in the country seems to be interested in: What percentage do minorities account for of all the mortgage dollars that went into foreclosure in 2007-08?

There's no single database anywhere that lists mortgages and foreclosures by race / ethnicity. Databases that contain that information need to be carefully constructed by matching disparate information, such as individual mortgages in the federal Home Mortgage Disclosure Act database, which are listed by race, with foreclosure records of local county sheriffs or registrars of deeds. So, this has to be done on a local basis.

The Big Enchilada of the mortgage meltdown was, of course, California, but the foreclosure studies that are now trickling in tend to be from areas peripheral to the Ground Zero. For example,

The first social scientists to do this were Gerardi and Willens of the Boston Fed for all subprime loans in Massachusetts. They found that Non-Asian Minority subprime borrowers tended to default at about twice the rate of white subprime borrowers, with blacks worse than Hispanics.

For the city of Minneapolis, he matches foreclosures from the sheriff's office with race and language-spoken at home data from the Minneapolis Public Schools, so he's just focusing on foreclosed households with a child in public school. One complicating factor is that he looks both at foreclosed homeowners and at renters who get evicted because their landlord is foreclosed. He doesn't have data on the race of the landlord, so I'll just look at the owner-occupiers.

Compared to most big cities outside of the Pacific Northwest, the city of Minneapolis is still quite white, with white households accounting for 48% of Minneapolis Public School students. being white.

Foreign-language speaking households accounted for 32% of foreclosures on "homesteading" (i.e., owner-occupying) homes among parents of Minneapolis public schoolchildren. Among this 32%, 65% were Spanish-speaking, 15% Hmong, 4% lowland Laotian (like Kang on "King of the Hill"), 6% Somali (Avast!), and 9% other.

Among the 68% of homeowners with public school children who got foreclosed who were English-speaking, probably somewhere around 75%-80% were NAMS (primarily black).

Until now, there hasn't been much solid data on who in Minnesota has lost homes to foreclosure. A recent University of Minnesota study finds the majority of owner-occupied foreclosures in Minneapolis involved Spanish-speaking families.

St. Paul, Minn. — Longtime real estate broker Rolando Borja saw the foreclosure crisis coming. His clients are mostly Spanish-speaking, and he said that community is especially vulnerable to predatory lending because most business relies on word of mouth.

"They told their cousin and their friend and their compadre and this and that, not realizing that the deal they just made was a bad one. And you know," he said, "they told ten people and those ten people told another ten, so we are talking about it was like a disease. It started spreading and it happened like that."

Experts say one reason for the increase is that subprime loans were heavily marketed to vulnerable groups.

Brokers canvassed churches, schools, advertised in Spanish-language media and went door to door. As a result, Borja said, lots of people took out risky loans they didn't understand to buy homes they couldn't afford.

"All these funky programs started coming out on the market," he said. "Pretty much anybody could buy a home,"

The University of Minnesota is the first to study the ethnicity of people caught up in the foreclosure crisis. The study linked two years' of data from Minneapolis sheriff's sales with public schools enrollment data, which tracks ethnicity and language spoken at home.

The data, from June 2006 to July 2008, paints a grim picture of the early stages of the current housing crisis. By far, more African-Americans and Hispanics lost their homes than any other groups. Most of the foreclosures were rental properties. That's already widely understood.

But here's what surprised the study authors: among homeowners, the foreign born lost their homes at a much higher rate - and the majority were Spanish-speaking.

"There is not a part of the city that's unaffected; there is not a part of the city where you didn't see foreclosed properties that had a foreign-born family living in them," said University of Minnesota Professor Ryan Allen, who authored the study.

Ryan said that while the numbers were surprising, they are nonetheless pretty easy to explain. Immigrants are thought to be vulnerable to predatory lending because of language barriers.

People who are foreign-born may also be less familiar with mortgages. In Latin America for example, buying a home usually means putting down all the money up front and buying the land where you want to build.

Another reason has to do with lending disparities. Studies have documented that minorities are more likely to borrow adjustable rate mortgages because they are more often turned down for prime loans. ...

"People who are saying, 'Yes, you can get into a home,' and it's homebuyers who don't have enough information to make an educated decision as to whether or not homeownership is the right thing for them," she said.

By BROOKS BARNES

The Walt Disney Company is relying on the insights of Kelly Peña, or “the kid whisperer,” to help reassert itself as a cultural force among boys.

As a former marketing researcher, I should be all in favor of more marketing research, but still ...

Market research to understand boys is all very fine, but it doesn't get you much closer to actually having shows that boys will think is cool. You wind up with a Powerpoint presentation with bulletpoints like:

- Boys are intrigued by testing boundaries

But shows based on Powerpoints are almost guaranteed to be lame.

To get cool shows, you have to go hire creative 25 or 30 year old guys who still kind of feel like they're 12 and let them come up with stuff that they'd like to watch. They don't need market research because they are their own market.

What marketing research can do is tell you whether the "Disney" trademark is perceived as so girly that boys won't watch stuff with the Disney brand name on it. Maybe they need a new alternative brand name the way Toyota has Lexus: to complement the Hannah Montana-dominated Disney Channel, they could have the Walt Channel.

April 13, 2009

From a August 12, 2007 Orange Country Register article, "Street of Broken Dreams," by John Gittelsohn and Ronald Campbell about one block of 48 homes in all-Latino Santa Ana, CA:

An Orange County Register investigation found that lenders targeting Hispanic buyers wrote $19 million in loans on this modest Santa Ana block of 1920s bungalows, where roses and jasmine bloom behind white picket fences. Those loans helped nearly triple sales prices from $182,000 to $600,000 over five years. Some owners got cash out. Others sold for big profits.

Then the credit stopped. And home values crashed. ...

A year ago, Angelita Medina Albarran, 47, a garment worker at St. John Knits, took out two loans from Fremont Investment & Loan to cover the entire $600,000 purchase price for 919 W. Camile St., a 1,450-square-foot bungalow. Her five grown children help pay the mortgage – $4,000 a month and scheduled to rise in May. ...

A Register analysis of federal housing data pinpointed West Camile Street as a center of the subprime borrowing binge. In 2005, 75 percent of the home loans in the surrounding census tract were subprime.

That's the highest concentration of subprime loans in Orange County and one of the densest in California. More than 200 neighborhoods in California, particularly in south Los Angeles and the Inland Empire, were similarly dependent on subprime lending. ...

The Register found that the brokers and lenders gave little consideration to the long-term performance of a loan or to borrowers' future. Subprime loans became the dominant source of funding for black and Hispanic buyers. Now the hidden costs of these loans are coming due, blighting neighborhoods as surely as any drug plague. ...

Another bank repo is the 1922 Craftsman-style bungalow advertised as a two-bedroom, one-bath at 946 W. Camile St. It still has the original hardwood floors, built-in cabinets and a faux fireplace surrounded by green tiles. But the last owner added four bedrooms and two toilets without permits in an effort to pack in more tenants to help pay the mortgage.

This kind of thing was a big part of the story.

Eight mortgages on the block were sold by Ameriquest Mortgage Co. ...

Owned by the U.S. Ambassador to the Netherlands and co-founder of the Museum of Tolerance, Roland Arnall ...

and other subsidiaries of Orange-based ACC Capital Holdings. That company paid $325 million in 2006 to settle predatory-lending investigations in 49 states.

Other subprime lenders on the block included now bankrupt New Century Financial and People's Choice Home Loan, both of Irvine. ConquistAmerica of Santa Ana, Option One of Irvine and Quick Loan Funding of Costa Mesa are other troubled Orange County subprime lenders that issued mortgages on Camile.

April 12, 2009

This stacked graph shows that mortgage lending to Latinos in Southern California's huge Riverside and San Bernardino counties, the Inland Empire, arguably now the foreclosure capital of America, grew 782% from $1.5 billion in 1999 to $13.5 billion in 2006.

Last October, my reader "Tino" introduced me to the federal government's Home Mortgage Disclosure Act database, which was set up to ensure that minorities are getting enough mortgages. It doesn't measure whether they're paying the mortgages back, and it's rather awkward to work with, but it's very useful for understanding how we got the Housing Bubble, which set off the Mortgage Meltdown, which set off the Global Crash.

As you know, somewhere approaching 7/8ths of defaulted mortgage dollars at the time of the economic crash in the fall of 2008 were lost in just four rapidly Hispanicizing states: California, Arizona, Nevada, and Florida. Indeed, California accounted for a sizable majority of foreclosed mortgage dollars by itself.

The above graph focuses on what has been perhaps the Ground Zero of the foreclosure crisis, Southern California's exurban Inland Empire, the Riverside-San Bernardino Metropolitan Statistical Area (Riverside and San Bernardino Counties). In the "Inland Empire, there were 112,284 foreclosure filings in 2008. The Inland Empire accounted for 3.6% of America's foreclosure filings in 2008 and likely approaching 10% of America's defaulted dollars due to the much higher home prices there at the peak of the Housing Bubble.

That was the most foreclosure filings of any metropolitan area in the country, more than the metro areas of greater Phoenix, Las Vegas, Tampa-St. Pete, Miami, Atlanta, New York City, Detroit, or even the giant Los Angeles / Long Beach area. At 8.02% of housing units in foreclosure, Riverside-San Bernardino endured the third highest foreclosure percentage in 2008, trailing only the Stockton and Las Vegas MSAs.

The point of trying to understand what happened is not to pin the blame on somebody, but to understand what happened.

Why has so much money been lost on foreclosures in the Inland Empire?

Well, because so much money was loaned out from, say, 2004 to early 2007.

The above graph, drawn from numbers from the federal Home Mortgage Disclosure Act database, shows for 1999 to 2007 the aggregate of dollars of originations of both "conventional purchase" mortgages (HMDA's Table 4-2) as well as FHA, FSA/RHS, and VA loans (HMDA's Table 4-1).

(Caveats: The graph above doesn't include other types of loans such as nonoccupant, home improvement, or multi-occupant. Nor does it include refinancing. Refinancings are an important part of the Housing Bubble story, but the HMDA database doesn't seem to offer a way to distinguish between refinancings that make it likelier that the borrower will pay back -- e.g., refinancing from a higher variable rate to a lower fixed rate -- versus refinancings that make the loan more risky ... e.g., taking cash out of home equity and blowing it in Vegas. Moreover, Home Equity Lines of Credit are optional for the lender to report, so I don't know how useful HMDA's refinancing data are. Further, to simplify things, I've left off Asian, blacks, and other minorities, mixed couples, and mortgages where race is unknown.)

As over-simplifed as it is, the graphs still gives an informative overall picture of what went on in the Inland Empire that drove prices to absurd levels followed by foreclosures: a giant surge of lending to Hispanics, followed by a sobering up in 2007 (that no doubt accelerated in 2008).

The most obvious fact is that new mortgage dollars flowing to Hispanics in this sprawling California region increased 782% from $1.5 billion in 1999 to $13.5 billion in 2006. Is there a word in the English language for that? We have words like doubling for when something increases 100% and tripling for when it goes up 200%, but is "nontupling" even a word?

This huge increase in demand clearly had a big impact on home prices.

In contrast, the non-Hispanic white borrowing over 1999-2006 was up 134% (more than doubling). To be fair, white borrowing from 1999 to the white peak in 2005 was up 199% (a tripling), but white borrowing in the Inland Empire fell 22% from 2005 to 2006 as more prudent people ran for the hills.

In the Inland Empire in 1999, Hispanics received only 34% as much mortgage money as non-Hispanic whites did. By 2006, Hispanics received 127% as much as whites.

Clearly, there was a mortgage bubble among non-Hispanic whites, too, but white borrowing peaked earlier, in 2004-2005, when home prices weren't quite as ridiculous, and has declined in a somewhat less frantic fashion. In contrast, the Latino bubble peaked in 2005-2006 when home prices peaked, and then started to collapse in 2007. (The bursting of the subprime bubble is usually dated to about the beginning of August 2007, although there were major tremors in March 2007). In 2007, Hispanic borrowing crashed back down to $5.0 billion as financial institutions finally started to worry about loan quality. The dollars flowing to Hispanics fell 63% from 2006 to 2007, versus 38% among whites. In the more realistic atmosphere of 2007, Hispanic borrowing was back down to 75% of white borrowing.

By the way, black borrowing from 1999-2006 was up 464% and Asian/Pacific Islander borrowing was up 987% to $3.4 billion.

These increases in borrowing dollars may sound like some craziness restricted to one section of California, but last year Tino found similar patterns at the national level: mortgage lending for home purchases to Hispanics was up 691% nationally from 1999 to 2006. For blacks, the increase was 397%. For Asians 218%, and for whites about 100%.

So, the Inland Empire wasn't unique in the size of the growth in lending to Hispanics, it just had more to start with (40% in 2000, rising to 47% in 2006). Also, unlike Texas, the supply of homes in California is held back by lots of environmental regulations, so supply lags demand much more in California, making the state more susceptible to price spikes.

In short, as Yogi Berra might say, the Inland Empire is just like the whole country, only more so.

Using Ground Zero as an example, we can get a pretty good understanding of the causes of the Housing Bubble and subsequent Mortgage Meltdown.

What caused the increase in home prices?

First, population growth. The total population of the Riverside and San Bernardino Counties grew 22% from the Census on April 1, 2000 to 2006 (the Census Bureau's American Community Survey estimated population over the 2005-2007 time period). That 731,000 more people.

Hispanics accounted for 71% of the increase (or 521,000 additional people), Asians for 11%, whites for 10%, and blacks for 7%.

This population increase, largely driven by immigrant ethnicities, was seen as leading to every rising home prices, which were seen as as justifying ever riskier lending.

Second, and more important, as we see above, ever more lending was directed to ever more marginal borrowers.

Keep in mind that the Bush Administration was actively promoting riskier lending to minorities, such as by calling for the elimination of down payment requirements and the speeding up of the approval process, in the name of closing the "racial gap" in homeownership rates. Bush's speech at his October 15, 2002 White House Conference on Minority Homeowership was very similar to the speech Angelo Mozilo of Countrywide Financial gave in February 2003 at a Harvard conference.

Not surprisingly, first time homebuyers in California got zero downpayment mortgages less than 7% of the time in the late 1990s, but rocketed up to 33% in 2004 and 41% in 2006.

As late as 2002, the year that George W. Bush announced his goal of adding 5.5 million minority homeowners by 2010, Hispanics in the Inland Empire got only 42% as much in mortgage dollars as whites. From 2002 to 2006, however, lending to whites grew 42%, while lending to Hispanics grew 325% (more than a quadrupling).

A fraction of that growth in lending was of course due to population growth. The Hispanic population in the Inland Empire grew by 42% from the Census in 2000 to 2006, versus just 5% for whites, so let's look at mortgage dollars on a per capita basis to remove the population growth factor:As you can see, in 2000, Hispanics in Riverside-San Bernardino received $1,417 per capita in mortgage dollars, 43% as much as whites, who got $3,324. In 2006, Hispanics got 117% as much as whites per capita: $7,725 per Hispanic versus $6,612 per white. Lending per capita to Hispanics in the Inland Empire was 5.5 times larger in 2006 than in 2000. Even more bizarrely, the rate at which mortgage money flowed per capita to Hispanics relative whites was 2.7 times greater in 2006 than in 2000.

Relative to whites, were Hispanics really 2.7 times more credit-worthy in 2006 than in 2000? No doubt there was some improvement in Inland Empire Latinos' incomes between 2000 and 2006, as they got more jobs and more pay as, say, mortgage brokers, real estate agents, home construction workers, furniture movers, and ... hey, do you notice the pattern here? Circular logic ...

Yet, Hispanics' ability to repay big mortgages certainly didn't improve 2.7 times relative to their white neighbors' ability to repay in just six years.

One might think that investors might have realized that Hispanics hadn't suddenly become a safe bet to repay huge mortgages. But, mortgage-backed securities hawkers like Angelo Mozilo of Countrywide Financial had a popular answer to doubts: that's just the redlining racist old way of thinking that kept Hispanics and blacks from owning homes at the same rate as whites.

If you wanted to be a big player in modern mortgage finance, like the much honored financial statesman Mr. Mozilo, you constantly repeated the Community Reinvestment Act cant about how America needs to loan more money to lower income and minority communities. In fact, the more you trumpeted how much you were lending to minorities, the more "regulatory cover" you enjoyed from pesky regulators asking questions about your high pressure boiler room operations.

If you wanted to make it big in the mortgage world but had politically incorrect doubts about all this, well, you kept them to yourself.

Is it a coincidence that the biggest purely financial crisis in 75 years, which has cratered the world economy, is occurring because of massive losses in the one financing sector that is most heavily and obviously influenced by government pressure? The investment banks could have used their sophisticated models to underestimate the risks of all sorts of assets, but apparently these models only blew up when used on mortgage-backed securities.

Thanks for reading all this. If you found it useful, please feel free to send it around.

(Boring methodological note: Why I am I using 2000 in this graph and 1999 in the other one? 1999 is the earliest year offered in the federal HMDA database, so I use that. Unfortunately, we don't have detailed population breakdowns for 1999, but we do have them for April 1, 2000 -- the Census -- and for 2005-2007 -- the Census Bureau's American Community Survey.)

Second Boring Note: This is revised from the graph I had up on Sunday that showed just conventional private borrowing but not FHA and other government-aided lending. FHA lending was moderately important back in 1999, so I decided to include it.

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